Avion Group acquires Star Airlines, second largest charter airline in France

Avion Group, a global transportation solutions group, is pleased to announce the purchase of the entire issued share capital of French charter airline Star Airlines, the second largest charter airline in the French market. Star Airlines operates charter flights mainly to destinations in Africa, The Middle East, and the Mediterranean. Star Airlines operates scheduled flights, in addition to charter services to the Lebanon, Mali and Mexico. This acquisition strengthens the Charter & Leisure division of Avion Group.

Avion Group, a global transportation solutions group, is pleased to announce the purchase of the entire issued share capital of French charter airline Star Airlines, the second largest charter airline in the French market. Star Airlines operates charter flights mainly to destinations in Africa, The Middle East, and the Mediterranean. Star Airlines operates scheduled flights, in addition to charter services to the Lebanon, Mali and Mexico. This acquisition strengthens the Charter & Leisure division of Avion Group.

Star Airlines carried approximately 900,000 passengers in 2005. On completion of this acquisition Avion Group is expected to carry approximately seven million passengers on an annual basis.

Star Airlines reported revenues of €173 million (13 billion ISK) for the year 2005, yielding profit before interest, tax, depreciation and amortisation (EBITDA) of €1.9 million (142 million ISK). Avion Group is projecting a substantial growth in EBITDA for Star Airlines in 2006 by implementing cost savings through synergies with other Avion Group entities. Purchase price is undisclosed. The purchase will be financed through Avion Group’s equity and with debt.

Star Airlines’ fleet is the newest in the French charter market, consisting of six Airbus aircraft; four Airbus 320s and two Airbus 330-200s.

Star Airlines is a privately-owned company founded in 1995 by Cédric Pastour, and currently employs approximately 460 staff.

Commenting on the acquisition, Magnus Thorsteinsson, Chairman of Avion Group, said:

“Star Airlines represents a fantastic opportunity for Avion to grow in continental Europe. Star Airlines gives Avion an access to a big market with a lot of potentials.”

About Avion Group
Avion Group is a global transportation solutions group founded on January 1, 2005. The company is organized into three business divisions -- Aviation Services, Charter & Leisure and Shipping & Logistics. Aviation Services consists of ACMI (Aircraft, Crew, Maintenance, Insurance) provider Air Atlanta Icelandic, maintenance provider Avia Technical Services and airport handling provider Southair. Charter & Leisure is represented by leisure service travel provider Excel Airways Group and TravelCity Direct. The Shipping and Logistics division is represented by Eimskip, the prime maritime transportation company in Iceland, with its fleet of approximately 30 ships. In addition to the vessels, there are currently approximately 60 Boeing and Airbus aircraft in the fleet.

Avion Group employs close to 4,500 people at 85 operational bases worldwide.

Contact Information

Magnus Stephensen

VP Business Development

Avion Group

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